Stocks began the new month on Monday with little enthusiasm, as the major market averages gave back a portion of last Friday’s gains. Maybe it was British Prime Minster Theresa May’s comments on Sunday that took wind out of the market’s sales, when she said the U.K. would start separating itself from the European Union by the end of March. Many have wondered what shape the Brexit would take, but so far the intent seems to be for what some are calling a “hard Brexit” or, in other words, a clean break. Though the major market averages attempted to recover some of their losses in the last hour of trading, by the closing bell the Standard & Poor’s 500 was off 0.33 percent and the Nasdaq Composite had slipped 0.21 percent.
On Monday, investors learned that the manufacturing sector of the U.S. economy expanded for the month of September with the ISM Manufacturing Index gaining over 2 points to 51.4. This was a welcome relief after the August manufacturing index contracted, due to an unexpected decline in new orders, and sent the index below 50 to 49.4. It takes a reading of 50 or above to indicate expansion. Some of the highlights of the September report were new orders gaining 6 points to 55.1, production up 1.4 points to 52.8 and export orders, which held firm at 52.0.
In other economic news, motor vehicle sales also improved during September, gaining 4.7 percent to a 17.8 million annualized rate. This higher-than-expected growth in auto sales is solid evidence that the U.S. economy was strong during the month of September, as sales of North American-made models grew by 6.0 percent 14.2 million. Strong auto sales are typically a reflection of a healthy jobs market, something we expect to hear more about this Friday when the September employment report is released.
This week’s top commodities tended to be energy-related after receiving a boost from last week’s OPEC meeting, where talk of capping oil production seemed to be getting some traction among oil-producing nations. For the week, the top-performing commodities were led by the S&P GSCI Lead index, up 7.65 percent over the past five trading days, followed by the S&P GSCI Crude Oil index, higher by 6.26 percent over the same period.